Are Google and Apple Out of Ideas?

Fortune recently hosted a great debate between Peter Thiel, the technology investor and entrepreneur, and Eric Schmidt, the chairman of Google.

Thiel argued that the huge amount of cash of Google’s balance sheet is evidence that the company is out of innovative ideas.

PETER THIEL: But, then the intellectually honest thing to do would be to say that Google is no longer a technology company, that it’s basically it’s a search engine. The search technology was developed a decade ago. It’s a bet that there will be no one else who will come up with a better search technology. So, you invest in Google, because you’re betting against technological innovation in search. And it’s like a bank that generates enormous cash flows every year, but you can’t issue a dividend, because the day you take that $30 billion and send it back to people you’re admitting that you’re no longer a technology company. That’s why Microsoft can’t return its money. That’s why all these companies are building up hordes of cash, because they don’t know what to do with it, but they don’t want to admit they’re no longer tech companies.